Troubled Canadian mobile phone outfit RIM is about to be sued for taking three days to sort out a fault which shut down its email services worldwide.
Last week’s problems began with a failure in a European data centre which spread across the world before it began to recover.
Law firms in the United States and Canada are exploring possible consumer lawsuits against Research In Motion and are trying to make up their mind if they have enough common claims against RIM to team up in a single lawsuit.
As you might expect, M’Learned Friends are looking at breach-of-contract or consumer-fraud claims, Reuters reports .
The breach-of-contract argument is based on the fact that RIM failed in its obligations to provide a service and could include carriers for BlackBerry as additional defendants. If the lawyers go for a consumer-fraud claim it would be based on the fact that customers were misled about the reliability of RIM’s networks.
What might save RIM from the wrath of the courts is that it will be hard to prove damages beyond loss of service. US state laws make the chances of bringing a nationwide consumer-fraud class action remote.
A recent US Supreme Court consumer class-action ruling in April made it more difficult for consumers to sue if a contract they signed with a company demands that disputes be settled through arbitration. RIM has this clause in its contracts.
RIM has not offered to compensate customers and is offering subscribers access to premium apps “as an expression of appreciation for their patience during the recent service disruptions.” The apps will be available for four weeks and are worth more than $100 per customer, RIM claims, but it’s not a thrilling list.
If it did pay back customers and service carriers for the days of service lost, the cost to the company has been estimated at $26 million.
Given RIM’s problems it needs this like a hole in the head. It would be even worse if consumers go to court, because there would be expensive legal costs on top of this.